Give Gen X, Y 'New Medicare', Centre for Independent Studies says

A right-wing think tank has suggested a "New Medicare" should be created for generations X and Y. Source: News Limited

MEDICARE funding should be split to allow generations X and Y to save for their own future health needs before the system is eventually scrapped, a right-wing think tank says.

The Centre for Independent Studies (CIS) is calling for a complete overhaul of Medicare because it says an ageing population and the rising cost of medical technology is making it unsustainable.

There has been an 80 per cent increase in federal health spending since 2000, and the trend is challenging the long-term future of publicly funded universal care.

Report author Dr Jeremy Sammut says without change "governments will struggle to fund the health services and other services that people will want and need".

Top of his list of solutions is the creation of "New Medicare" for generations X and Y only.

New Medicare would create superannuation-styled savings accounts to pay for minor health problems, with annual deposits made by the federal government in lieu of Medicare entitlements.

Insurance vouchers would be issued so people could buy cover for chronic complaints, under a system that would set a mandatory minimum range of services.

Baby boomers and those older would remain in the current system, which would be phased out when the self-funded New Medicare matured.

Dr Sammut also called for the reintroduction of compulsory co-payments for GP visits and for a means test on Medicare entitlements, so the government wasn't paying for the health needs of the well-off.

"The government tries to be all things to all people and it tries to provide all services to people whether they need them or not, whether they can fund it themselves or not," Dr Sammut said.

"Because health is seen as a bit of political sacred cow and we have these romantic ideas about this universal system, no one is prepared to make any hard decisions."

He admitted Generation Y - generally those born after 1977 - and Generation X - those born after 1966 - would oppose changes excluding them from the universal health care enjoyed by older Australians.

"Yes, there are costs for Gen Y and Gen X, but they are going to pay one way or another," he said.

"Either they are going to pay through their taxes to fund an inefficient public health system, or we can move to this more efficient system."

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